COMP NEWS – Employers are expecting healthcare prices to rise in the next year. In today’s difficult labor market, employers are attempting to find ways to increase employee healthcare benefits while mitigating an increase in cost for the employees themselves.

Many employers expect their overall medical and pharmacy costs to rise by about 5 percent next year, after a smaller increase last year, according to recent separate surveys by Mercer and another benefits consultant, Willis Towers Watson. As more people get vaccinated for Covid-19 and life gradually returns to normal, workers are expected to seek medical care that they had postponed during the pandemic, pushing up costs.

Employers are now offering even more coverage for their employees, but are lessening the range of providers offered.

But while workers may see more perks, they also may find that their health plans offer narrower doctor networks and emphasize less-costly telehealth care, as employers seek to rein in health care costs without making workers pay more out of pocket.


But employers won’t necessarily pass along all of their higher costs to workers, said Julie Stone, managing director of health and benefits at Willis Towers Watson. “Employers are very concerned about losing workers,” she said.

Not only will employers have to shoulder the increasing healthcare prices, but they will also have to focus on attracting new talent. Some large employers are going to lower the amount employees would have to contribute to healthcare despite the increasing rates.

Among the largest employers — those with 20,000 or more on the payroll — about a third said they would reduce the share of health premiums shouldered by workers, while 17 percent said they would increase it, Mercer found. (Mercer surveyed more than 1,700 public and private employers over the summer.)

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